While fears for US spring milling wheat production are helping to drive grain prices upwards, this could prove to be more of a spike than a trend for the moment.
Spring wheat crops in the northern plains of the US are suffering due to dryness, which is expected to impact heavily on yield.
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International grain futures markets bounced again during the past week, but mainly upwards, especially wheat. Weather and dryness drove sentiment and this was reflected in upward price movement. While this sentiment is still quite strong on quality milling wheat, it is less so on maize, where rain in parts of the US Midwest has helped to alleviate these concerns in the feed grains market.
The combination of heat and dryness is fuelling concern for 2017 output and the market is falling more and more into the grip of the weather. Dryness alone may not be enough to drive prices, as there have been many such reports in recent years, but high temperatures are even more serious. This stresses crops and accelerates development beyond the potential of crop growth to compensate.
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Price movements are mainly in futures markets and physical markets take a different view. They have responded for the moment, but they expect to slip back. December MATIF wheat closed at €173.25 last Friday week, €177.25 last Friday and at €180/t at close of business on Tuesday. This has helped bring new-crop wheat quotes as high as €180/t, but this may not be sustainable currently. Many growers said they would move at this price, but will they?
Dry barley for November got up around €166/t, but this is being restrained by falling maize and feed grain prices. Green prices also moved early in the week, with quotes of €146/t for wheat and €135/t for green barley for harvest.
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International grain futures markets bounced again during the past week, but mainly upwards, especially wheat. Weather and dryness drove sentiment and this was reflected in upward price movement. While this sentiment is still quite strong on quality milling wheat, it is less so on maize, where rain in parts of the US Midwest has helped to alleviate these concerns in the feed grains market.
The combination of heat and dryness is fuelling concern for 2017 output and the market is falling more and more into the grip of the weather. Dryness alone may not be enough to drive prices, as there have been many such reports in recent years, but high temperatures are even more serious. This stresses crops and accelerates development beyond the potential of crop growth to compensate.
Price movements are mainly in futures markets and physical markets take a different view. They have responded for the moment, but they expect to slip back. December MATIF wheat closed at €173.25 last Friday week, €177.25 last Friday and at €180/t at close of business on Tuesday. This has helped bring new-crop wheat quotes as high as €180/t, but this may not be sustainable currently. Many growers said they would move at this price, but will they?
Dry barley for November got up around €166/t, but this is being restrained by falling maize and feed grain prices. Green prices also moved early in the week, with quotes of €146/t for wheat and €135/t for green barley for harvest.
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